CEO Who Took Out a Business Loan Under an Accountant's Name…Fraud Charge Not Referred

A CEO in his 30s who took out a loan under another person's name and used it as company operating funds was investigated by police on fraud charges but received a no-charge disposition.

The Cheonan Seobuk Police Station decided in March not to refer the case, citing insufficient evidence, regarding Mr. A, who had been booked on fraud charges.

When Mr. A needed company operating funds last year, he asked accounting staff member Ms. B to take out a loan and received about 93 million won. At the time, Mr. A said he would first use the loan as company funds and then, after a certain period, transfer it into his own name. However, when the promise was not kept, he came to face fraud charges.

Mr. A completely denied the charges. He claimed that he had judged he could sufficiently repay it because there were payments due from a partner company, and that he had merely proceeded first under Ms. B's name after being informed by the lender that a name transfer would be possible. He also explained that the name transfer was not carried out because contact with the lender was subsequently cut off.

The police accepted Mr. A's argument. Reviewing the account transaction records, the police judged that intent to swindle was not recognized, considering that of the money received from Ms. B, the fee was paid to the lender and the remainder went into the corporate account and was used for company operating expenses, and that Mr. A had steadily paid the loan interest for a certain period.

Attorney Yang Ki-yeon of Daeryun Law Firm, who represented Mr. A, said, "Whether the crime of fraud is established is judged not by mere default on debt but by whether there was the intent and ability to repay at the time the money was received," adding, "We faithfully demonstrated the circumstances of the loan, the details of how the funds were used, and the circumstances of the interest payments."

Reporter Hwang Jung-won (garden@sidae.com)

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